When you get injured in an accident, you will have many expenses. Many do not fit neatly into the categories the insurance company lists on its claim application. As a result, you will pay many of these expenses hoping for reimbursement from the insurer when your claim settles.
Here is an overview of the out-of-pocket expenses you might incur after an accident and how the insurer decides whether to reimburse them.
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New York uses a no-fault auto insurance system. This means vehicle owners in New York must buy certain insurance coverage:
PIP coverage is the “no-fault” part of no-fault insurance. When you get injured during an accident, your insurance company will pay:
Your insurer will pay PIP benefits regardless of who caused the accident. But in exchange for these guaranteed benefits, you cannot seek compensation from the at-fault driver unless you meet certain conditions.
Liability insurance covers third parties when the insured customer causes an accident. For example, suppose that a negligent driver has legal liability for a car accident. The driver’s liability insurer has a contractual duty to pay claimants on the driver’s behalf.
There are two types of liability insurance. Bodily injury liability (BIL) coverage pays for necessary and reasonable expenses resulting from an injury. Since New York is a no-fault state, you can only make a claim against the at-fault driver’s BIL insurance under two conditions:
Unlike PIP, you will not have a hard cap on out-of-pocket expenses if you file a claim against the at-fault driver’s BIL coverage. Instead, you should get reimbursed for out-of-pocket expenses caused by your injury that were reasonable and necessary.
New York also requires you to buy property damage liability (PDL) coverage. This coverage pays to repair or replace your vehicle after a car accident. Again, PDL coverage will pay for any reasonable and necessary out-of-pocket expenses caused by your accident.
The types of expenses and the amount of reimbursement you can seek will depend on the nature of your claim.
Bodily injury claims, whether filed as PIP claims or BIL claims, cover all necessary medical expenses for:
Your bodily injury benefits cover everything on this list. Thus, if you pay a copay for your prescription drugs out of your pocket, your insurer will fully reimburse you for that co-pay. Even though you paid the co-pay out of pocket, insurers consider the co-pay a medical expense rather than an out-of-pocket expense.
Out-of-pocket expenses include reasonable and necessary expenses other than medical and job-related losses. Some examples of out-of-pocket expenses for bodily injuries include:
If you file a PIP or uninsured motorist claim, you can only claim $25 per day in out-of-pocket expenses. If you file a BIL claim, you have no limit. Under either type of claim, these expenses must be:
You must have paid a fair amount for the good or service. If you overpaid, the insurer can deny reimbursement or reduce the reimbursement to a reasonable rate.
The expense must be necessary based on your injury. If you fractured your leg, you might need your groceries delivered. If you fractured your rib, you might not.
You must show some causal link between the expense and your injury.
While you might believe that getting a haircut will relieve your depression after suffering a concussion, your insurer might not agree. Conversely, if your concussion causes post-traumatic stress disorder (PTSD) that prevents you from driving, an insurer may reimburse you for the taxi fare to get the haircut.
Insurers will also reimburse you for out-of-pocket expenses for the loss of your vehicle. These reimbursements often cover additional expenses that you might not get under a bodily injury claim.
For example, if the at-fault driver disabled your vehicle in the accident, you can seek reimbursement for a rental car regardless of how badly you got injured. Similarly, an insurer may pay grocery delivery charges if their customer totaled your car even if your injuries allow you to drive.
To get reimbursed for out-of-pocket expenses, you need to document them. Receipts, bills, and card statements will help you prove your expenses. You also need to document the reason for the expenses to show they were reasonable, necessary, and resulted from your accident.